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Tuesday, 10 December 1974
Page: 3319


Senator BAUME (New South Wales) - The Senate is considering the Banks (Housing Loans) Bill 1974 which aims to appropriate $ 1 50m to banks, mainly savings banks, for lending for housing. This is a rescue operation, as Senator Hall and Senator Carrick have stated. It is nothing more than a rescue operation in a desperate situation. Although we applaud this measure it is a disaster that it should be necessary. The Minister for Agriculture (Senator Wriedt) stated in his second reading speech on this Bill: . . the reduction in activity in the home building industry was in danger of becoming more extensive than the Government would have wished.

This sounds fair enough until we consider what the Government proposed in July when this session began. In July when the Governor-General gave his Speech we learned that the Government intended that there should be a reduction in activity in the housing and home building industry. We have it on record that that was the intention of the Government. It is worth thinking about some of the speeches made during the AddressinReply debate when speaker after speaker on this side of the chamber drew attention to this part of the Government's program and begged the Government to think again because what it was proposing was a very dangerous course, one which we thought could lead to a collapse of the home building industry. So it has proved.

We have in front of us now a situation of the utmost gravity, as previous speakers have so capably pointed out. We have a very different situation today. We do not have a government telling us that it wants to see some abatement in the home building industry; we see the reverse. We hear the Minister telling us that although housing construction was at a high level at the end of the June quarter it is down at the present time and the Government thinks that the action proposed by this Bill will help to restore the situation. We are seeing the effects of the grossest and most tragic king of Government miscalculation over the last few months. It is worth asking ourselves whether this was an act of deliberate Government policy or was it something that happened without the Government being able to control events. We could say that it was deliberate Government policy if we refer to the GovernorGeneral's Speech. The Government at that stage was seeking ways of applying its credit squeeze, of continuing with high interest rates and of doing what it could to cut down activity in the home building industry.

If that is the case the Government must stand condemned for what we see in Australia today, where many people cannot get jobs, where the home building commencements are down and where the industry faces collapse. Alternatively, perhaps it was not planned. Perhaps things have just drifted into this situation. But if that is the case the Government is equally culpable for its responsibility is to provide the kind of conditions in which home building and other major industries can exist and can remain in some state of health. Really it does not matter which way it has gone, it is equally disastrous.


Senator McLaren - That is how it was in 1 96 1 , was it not?


Senator BAUME - Senator McLareninterjects, but this is the cry of someone in bad trouble. It is worth looking at the report put out by the Department of Housing and Construction dealing with finance for new homes. We learn from it that a survey carried out in May and June this year shows that the average Australian buying his first home is a young person under the age of 30 years. He earns only a modest income, generally less than $8,000 a year. He has a child. He has secondary education. He has extra debts. He has extra credit responsibilities. He has borrowed more than 70 per cent of the money he needs to build his home. This is the picture of the Australian who is trying to get his own home. He has got most of his money from a bank or from a building society. I shall return a bit later to that point to support what Senator Carrick said, that the Bill provides finance for only one of the institutions which is providing finance for the home building industry.

We have welcomed the allocation of funds, but we deplore the necessity for this kind of action. There will be a shortfall this year of at least 50,000 homes in Australia and by the end of this financial year fewer than 100,000 homes will have been commenced in Australia. What a tragedy this is in a country where we aim for home ownership and where we have had, until now, the highest level of home ownership in the world. This present situation has been achieved under a Labor government. We have an industry that can no longer produce the 160,000 homes wanted to give people their chance to live in their own homes. We have an industry which has employed approximately 400,000 people and, as Senator Carrick has pointed out, 95,000 of those jobs are in immediate jeopardy- almost 25 per cent of the people employed in the home building industry. What kind of situation is this into which the Government has taken us? It is not as though the Government has not been warned. If we look back into the Hansard records we can see reference after reference to what was ahead. As Senator Hall stated, uncontrolled inflation is a large part of the problem.

The President of the Master Builders Association said in a statement today that many of the builders who will close at Christmas time will not reopen in the New Year. This in itself is a disaster. We are going to have an army of unemployed, an army of people who will be made unemployed by the high interest rates and the uncontrolled inflation that has been a legacy of our Labor Government. No credit has been available. We have had a climate in which survival of the home building industry has been impossible. We have no confidence and we will have a loss of jobs.

The second big point we should mention with regard to this loan is that the appropriation is for housing loans; it is not necessarily for housing construction. There is a big difference between money put into the purchase of houses and money that is put specifically towards the building of new homes. I emphasise again what Senator Carrick said, that unless that $ 150m finds its way into the construction of new housing much of its intended effect will be dissipated. Clause 3 of the Bill provides money for the purpose of assisting men and women to purchase, erect or extend homes. It would be better if the money were to be provided specifically for the erection or extension of homes so that the money would go into the industry that provides jobs for those actually involved in building. We want to make sure that this money actually works to provide employment opportunities for those Australians who need employment. The problem is one of home construction, not just of the real estate industry. We are concerned with the home building industry itself, and this is one problem that could have been attended to in this Bill.

My next point is that the banks are getting all this money. The Department of Housing and Construction, in the document it put out to which I have referred and which all honourable senators have seen, points out in figure F2 on page 38 that if one looks at the sources of finance for first homes one finds that 27 per cent of the finance for all homes included in the survey conducted by the Department came from permanent building societies and that almost the same percentagejust marginally higher- came from the savings banks. It is very good that the savings banks are getting some financial assistance, but it seems to me iniquitous that we have a situation in which the capacity of the permanent building societies in Australia to carry on their important job has been seriously eroded. The building societies have been affected by the inflation in Australia, by the general lack of confidence among investors and by the high bond rate which has made it impossible for them to compete. The result has been a marked decrease in the number of loans given by permanent building societies for housing.

Recently I asked a question of the Minister for Housing and Construction (Mr Les Johnson) and in his reply he set out the details of the job being done by the permanent building societies in Australia. The number of loans approved for houses in 1971-72 was 48,000; in 1972-73 it was 70,000; and in 1973-74 under the Labor Government it had dropped to 41,000. It had dropped in one year from 70,000 to 41,000. That is what the Labor Party has done to the capacity--


Senator Davidson - Just over half.


Senator BAUME - Just over half, as Senator Davidson said.


Senator Wriedt - Are you quoting Australiawide figures?


Senator BAUME - I am quoting the figures given to me by the Minister for Housing and Construction in response to Senate question No. 173.


Senator McLaren - What was the question?


Senator BAUME - I am not going to tell Senator McLaren what the question was. He can look it up in Hansard if he is interested. The number of approvals of loans by permanent building societies fell from 70,000 in 1972-73 to 41,000 in 1973-74, and it has fallen further since. So we have a situation in which the permanent building societies are finding it virtually impossible to lend money to do the job which they have done so well for many years.

This Bill is a salvage operation. It is designed to take care of a disaster created by the Labor Government. We know that a disaster faces the whole housing construction industry at the present time. Many people will have to leave the industry, and recovery will take many years in spite of efforts such as this to plug up some of the holes. It will not be just a question of diminished activity until the end of the March quarter. This will carry on for a long time as builders and other people go out of business and take themselves to other forms of employment. There will be no employment in the housing industry, just as there is no employment in so many other industries in Australia today.

I have a particular interest in the western suburbs of Sydney. It appalled me recently to learn that over 13,000 people are receiving welfare cheques between Parramatta and Penrith and that in the district of Mount Druitt alone in the western suburbs of Sydney- an area in which I do electoral work- over 25,000 people are receiving welfare. What kind of Christmas are they going to have? They will not have many kind words for the Labor Party which gave them this unemployment. We are seeing in this situation an albatross around the neck of the Labor Party. We welcome any measure to undo the disaster it has wrought on Australian housing. This is only one of a series of disasters. At present we seem to see the Labor Party lurching from debacle to debacle, from scandal to scandal, from disaster to disaster, from defeat to defeat and, hopefully, to its destruction as a government.







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